"A merged AT&T and T-Mobile would combine two of the four largest competitors in the marketplace, and would eliminate T-Mobile, an aggressive competitor, from the market," Deputy Attorney General James Cole said.

Moreover, AT&T is trying to gloss over the inevitable job losses that would come from such a large-scale combination of two direct competitors by focusing on bringing back a few thousand call center jobs from overseas outsourcing operations. The fact that AT&T is trumpeting this angle far and wide shows how concerned the company itself and outside observers are about job losses.

If the deal is scuttled by this DOJ action or anything else, AT&T will give T-Mobile $3 billion in cash as well as another $3 billion in spectrum licenses and roaming agreements. That's a hefty breakup fee and the reason why Ma Bell is fighting so hard to get the deal done.

The DOJ opposition doesn't kill AT&T-Mobile dead, but it's a very strong strike against the deal. The department also opposed a merger between Nasdaq OMX (NAS: NDAQ) and NYSE Euronext (NYS: NYX) , prompting the Nasdaq to withdraw its bid. On the other hand, regulators also hated the idea of VeriFone Systems (NYS: PAY) buying competitor Hypercom, but that suit was settled and the deal has been consummated.

If this blockbuster telecom deal happens, it will be riddled with concessions and divestitures. Comcast (NAS: CMCSA) had to sell off parts of NBC Universal, and VeriFone did the same to settle its Hypercom complaints. I expect similar agreements in this case, and the merger may still not happen.

Boosted by those breakup concessions, T-Mobile might even leapfrog Sprint-Nextel (NYS: S) and become a decent competitor all its own. AT&T shareholders would hate that outcome, but consumers would love it.

How do you feel about the government potentially killing AT&T's $39 billion deal? Let loose your elation or vitriol in the comments below.